The Business Times
business-time-50
THIS TIME IS DIFFERENT

Momentum trumps fundamentals

Equities may pull back in the short term, but indicators suggest 2024 will be a better year for stocks than most investors expect

google-preferred-sourceAdd BT as a preferred source
    • When momentum is as strong as recently seen, median returns have been at least double the long-term average up to a year later.
    • When momentum is as strong as recently seen, median returns have been at least double the long-term average up to a year later. PHOTO: PIXABAY

    Leonardo Drago

    Published Mon, Jan 15, 2024 · 06:31 PM

    ONE of the most valuable pieces of trading advice I ever received was during the early days of my finance career in Hong Kong: “Emphasise price action over fundamentals; align your positions with the market, rather than opposing it. When price and fundamentals are in conflict, price wins.”

    The current price action of oil illustrates this point. Since the Israel-Hamas war began in October 2023, oil prices have fallen by 16 per cent. This price action suggests that markets may not be anticipating an escalation in this war.

    Similarly, the price reversal after equities boomed in early November 2023 was swift and triggered many positive momentum indicators, bringing indices close to regaining their all-time highs.

    This Time is DifferentStock Markets

    TRENDING NOW

    Traffic through the strait has been resuming but with interruptions, and there is still little clarity over a permanent solution for passages through the chokepoint.

    Qatari LNG ship struck in Strait of Hormuz, testing US talks

    This comes after a Citi note on Tuesday that lifted target prices for all Singapore banks, with a leading preference and “buy” call for DBS.

    DBS shares rise 1.9% to hit all-time intraday high as sentiment improves

    Aster deputy CEO Andre Khor, citing the age of the “polycrisis”, says: “It’s very important to be agile, to be focused on execution… We don’t know all the answers but we keep going forward.”

    ‘Baptism of fire’: Andre Khor on leading Singapore refiner Aster through an energy crisis

    Singapore ranks as the world’s most expensive city for cars and placed third globally for residential property.

    Singapore retains top spot as most expensive city for HNWIs, with five Apac cities in global top 10

    Latest T-bills Treasury Bills Results & Interest NewsLatest SSB Singapore Savings Bonds NewsLatest COE Certificate of Entitlement News
    Latest Johor-Singapore SEZ NewsLatest BTO Build To Order & Sales of Balance NewsLatest STI Straits Times Index NewsLatest SGX Dividends, Share Price NewsLatest Bonds Market NewsLatest Singapore Stocks To Buy NewsLatest Singapore Economy News
    View More